Reform needs to support the poor

By Lai Hsiang-ling 賴香伶 /

Tue, Jan 22, 2013 - Page 8

The Democratic Progressive Party’s (DPP) Jan. 13 demonstration was followed by another protest march by labor groups on Saturday. While the DPP’s political motive was to launch a bid to recall President Ma Ying-jeou (馬英九), workers are struggling against unfavorable political and business conditions.

What worries workers the most is the practice of unpaid leave, what hurts them most is the planned reduction in labor retirement pensions, what confuses them most is that part-timers — but not full-timers — have to pay a 2 percent supplementary premium under the Second Generation National Health Insurance program, and what irritates them most is that each Taiwanese is saddled with an average national debt of NT$220,000 (US$7,570).

The social unrest will not be relieved by the DPP’s call for a change of government, because a change in government will not bring a change in thinking.

Let us use a recent controversial issue as an example: The government has fiscal problems, and Taiwan’s national debt is almost as high as Greece’s. The government and the opposition have argued about canceling year-end bonuses and the 18 percent preferential interest rate for retired military personnel, civil servants and public school teachers, but their focus is on whether these measures should be written into law, whether such a law should be retroactive and whether key officials should resign to take responsibility.

In the end, they cut the bonuses of retired government employees and state-owned enterprise workers to make it seem as if they were determined to push for reform, but the measures fell short of public expectations.

Of all the public complaints, the greatest is about high housing prices. Workers earning NT$30,000 a month will only be able to purchase an apartment in Taipei if they work for 28 years without eating and drinking.

Meanwhile, an insurance company that obtained a large tract of public land in downtown Taipei several years ago made a profit of several billions of New Taiwan dollars by selling it to a construction company.

Without a capital gains tax and a property tax that is based on market value, the government could do nothing to stop speculators from driving up housing prices.

The income gap between the rich and poor is fueling social conflict. The government’s social insurance programs and mutual help organizations for the disadvantaged are unable to provide a sustainable social security net for the needy. The result is that salaried workers and government employees blame each other for having to pay more to fund the pension system, while getting smaller payments in return and having to retire later.

As government revenues decreased and it continued issuing new debts to service existing debts, total hidden government debt might be as high as NT$20 trillion. This debt translates into each Taiwanese owing NT$900,000 — almost NT$700,000 higher than the official debt per capita.

The wages of 90 percent of employees at small and medium-sized enterprises have regressed to the level of 14 years ago. Meanwhile, government lobbying remains rampant, and corrupt officials and their families continue to make illegal profits. The government’s reorganization efforts have also proven to be a big disappointment.

Lastly is the Second Generation National Health Insurance program, which took effect on Jan. 1. Despite a NT$10 million cap on taxable supplementary income, enterprising individuals have thought of various tactics to avoid the tax. It has been less than a month since the program was implemented, but Minister of Health Chiu Wen-ta (邱文達) has already proposed new amendments to push for a “third-generation national health insurance” program by 2016 to close the loopholes.

Seeing how the ruling and opposition parties restrain themselves on the legislative floor when it comes to the interests of the rich, one cannot help but wonder how the public could ever hope for reform.